JAMES RAY COLSONV

STANDARD OIL COMPANY OF CALIFORNIA

60 Cal.App.3d 913 (1976)

131 Cal. Rptr. 895

Sully-Miller ConstructionSully-Miller Contracting Company was founded in 1923 by G.W. Sully and Earl B. Miller, who recognized the need for quality paving and grading operations in the Long Beach area of Southern California. During the past eight decades, the Sully-Miller name has become known throughout California and the region as a company that stresses in its daily operations on Ten Core Values -- Safety, Quality, Respect, Trust, Integrity, Enjoyment, Innovation, Teamwork, Social Responsibility, and Continuous Learning.

Standard Oil Company Then

Chevron Oil Refinery Today

FACTS:• Colson, an independent contractor for Sully-Miller Construction Company, was injured while doing surface

road repair work on the premises of Standard Oil’s Petroleum refinery. Colson had been working in a remote area of the refinery near a pipeline used by Standard Oil to transport sulfuric acid needed for its operations when a small leak developed in a straight section of the pipeline, causing acid to spray on Colson’s face, arms, and chest. Colson filed suit against Standard Oil, seeking compensatory damages and $1 million in punitive damages.

• The case went to trial and the jury returned verdict in favor of Colson in the amount of $100,000. The case was submitted to the jury as to the issues of negligence and compensatory damages alone. Standard Oil moved for a new trial on the basis of insufficient evidence to support damages awarded and the court granted the motion. The case was retried on August and September of 1971.

• Prior to the second trial the court ruled that Colson did not have sufficient evidence to support his claim for punitive damages and would not allow him to introduce evidence on the punitive damages issue. Colson amended his complaint for the 5th time to include punitive damages in the amount of $1 million. Standard Oil filed a demurrer which was sustained without leave to amend, leaving as the only issue to be tried liability and compensatory damages. Colson appealed, contending that the court erred in sustaining the demurrer on punitive damages. The court of appeals overruled the lower court’s decision sustaining the demurrer.

• The case proceeded to trial as to the issue of punitive damages. Standard Oil ultimately moved for a judgment of nonsuit which they later withdrew and moved for a directed verdict which the court granted.

ISSUE:

• Did Standard Oil negligently delay known repair work to warrant Colson’s claim for punitive damages?

• Is Colson’s evidence sufficient to preclude the direct verdict ruling?

RULE:

• The purposes of punitive damages are to punish the defendant for outrageous misconduct and to deter the defendant and others from similar misbehavior in the future. The nature of the wrongdoing that justifies punitive damages is variable and imprecise. The usual terms that characterize conduct justifying these damages include bad faith, fraud, malice, oppression, outrageous, violent, wanton, wicked, and reckless. These aggravating circumstances typically refer to situations in which the defendant acted intentionally, maliciously, or with utter disregard for the rights and interests of the plaintiff.

• Direct Verdict: an order from the presiding judge to the jury to return a particular verdict. Typically, the judge orders a directed verdict after finding that no reasonable jury could reach a decision to the contrary.

APPLICATION:

• The key issue to award punitive damages is whether there was evidence that Standard Oil's conduct was done either with knowledge that Colson and others similarly situated would probably receive serious injury, or with a wanton and reckless disregard of the possible results. (Reuther v. Viall, 62 Cal. 2d 470, 475 [42 Cal.Rptr. 456, 398 P.2d 792].) 

• As proof, Colson offered testimony of several individuals who testified of over 50 leaks to the pipeline, failure to replace the pipeline, prior splitting of the pipeline and of work areas unsupervised and without signs or warnings against such acid. Colson also testified that he had no knowledge of the acid in the pipeline and that he was never told to wear protective equipment; however, the Court found that Colson did not provide evidence that Standard Oil acted in willful disregard.

• The court found that Standard Oil graphically dealt with the issues of the pipeline. In fact each leak was repaired immediately and generally on the same day. Standard Oil quickly dealt with problems and made repairs in a manner that would protect personnel in case of further leaks. Standard Oil contains over 500 miles of pipeline and 27 miles of roadway surface and during 18 years there have been many inevitable maintenance issues developed within the usual course of operations. However, Standard Oil’s conduct concerning the leak does not provide proof that would warrant punitive damages.

CONCLUSION:

• “There is no evidence of willful and wanton acts or omissions by Standard Oil that would cause probable harm to Colson or others. We are fully aware of the law governing the granting of a motion for a directed verdict.[6] There was no evidence of sufficient substantiality to support a punitive damage verdict against Standard Oil.”

• The judgment is affirmed.